Freemium (or should libraries charge for services?)

Who doesn’t like to get something for free? Whether we are talking about giveaways at a restaurant opening or free information on the Internet, everyone loves the idea of getting something for free. A marketing strategy and business model that relates to this idea is the concept of “freemium.”

Freemium is a way businesses get users or consumers in the door with free products or services, as a way to market their enhanced, premium-priced services. Free + Premium = Freemium. Just recently in Publishers Weekly (May 18, 2009), Chris Anderson, author of Free: The Future of a Radical Price was interviewed about newspapers (specifically News Corp) charging for online content. In July, his book will be offered for free online from Hyperion. In the book, Anderson looks at how so much of what is already online is available for free. In the interview, he discusses how companies use free content to market their paid content. Other supporters of this business model view it as a way to attract customers and generate buzz. An example from the business world is Adobe launching a free, web-based version of its popular Photoshop software. Adobe then hopes that the free version will entice consumers to purchase the full software package.

How does the freemium model apply to libraries? I’m not entirely certain of the long-term implications but it does seem to me that libraries that are implementing additional fees for services that go beyond the normal scope are taking advantage of this freemium business model (free for some services, pay for value-added services). Libraries are facing tightening budgets and I understand the need to generate revenue other than fines and regular fees. People talk about the public library as being “free” and in a way, it is free because library users pay for those services through their tax dollars.But as Nancy Dowd of The ‘M’ Word – Marketing for Libraries blog stated back in February, why not create a line of premium services for which to charge? The basic services that people have come to expect from the library would remain “free.” But individual libraries could choose to offer services above and beyond, like research services and books by mail, and charge a fee for those premium services.

Lately I’ve been hearing about libraries who are already starting to charge for some of their services, due to budget shortfalls and other funding constraints. But it makes me wonder about what criteria libraries are using to decide which services are the ones that should be paid for by the patrons. For instance, look at the Dallas Public Library’s Street Smart Express service. Dallas PL is charging for high-demand items, like best-sellers, hot DVDs and audiobooks. The Assistant Director cited 2 main reasons for the fees: To limit wait times and to limit the number of holds on an item. Not all items are part of this special collection and a patron could choose to wait to borrow the item once it is out of the collection. Read more about it here.Another library charging for services is the East Brunswick Public Library. My sister, who is a frequent library user and avid reader, was dismayed to read in her local paper that the library planned to start charging for every reserve placed. She did the math and realized that the average cost for the reserves she places per year would total over $100.These are just 2 examples of providing fee services above the regular “free” services or starting to charge for once free services, but I am sure there are more.

So where and how do libraries decide which services warrant a fee? In the examples listed above, Dallas selected a new service that has the potential to speed up the usual library experience. Give the patron what they want NOW. On the other hand, East Brunswick started charging for a service that in most libraries is free. What message are we sending to our patrons if we start charging them for something that they never had to pay for before? And how much damage are we doing to our user base to start charging for these services that have traditionally been free? If my sister is any indication, the potential damage is significant. She even considered getting a card in another library, farther away from her house, less because of the money and more because of how upset it made her. Other patrons may just choose to not use a library at all.

Charging for services that have long been free, especially now as the general public is feeling the economic crunch, could ruin a library’s good will and support base. If your library must start charging, find a way to add some value to that service to make it “premium.” Or follow Dallas Public Library’s example and offer the paid service as an option, not a mandatory fee. It is never easy for librarians to decide to start charging for services. However, I think that its not a bad idea to charge for services that are “premium” to YOUR library users. Which services those are will depend on what services your patrons use and which ones your patrons would like to have that you aren’t already offering. But make sure they are value-added services.

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17 Comments

1.Tyler Rousseau | June 4, 2009 at 9:37 am

Charging for holds might sound good on paper(i.e. less wait) but puts a clear disadvantage to those with less money to spare. The typical way of placing requests is 'first come first served.' Why should a patron with less money to spare be penalized in the queue process because of this?

The informational needs of databases can are equal for all economic levels. One of the points of databases is housing materials virtually so they do not take up space physically. If these materials were available, physically, in the library, would we limit their access as well based on how much the subscription fee is?

Public libraries are intended to be for the people, regardless of age, gender, race or pocketbook. Charging for services begins to thin that line with caveats.

Personally, I do worry about the idea of charging services. As a resident of Trenton, a library system which is in desperate need of money, charging services would place a very big line between the have and have nots.

2.Richard LeComte | June 4, 2009 at 9:53 am

Look, I'm not a raging liberal; I'm more of a moderate who rages over petty offenses, like my cable provider not carrying Bravo. But charging for library services that heretofore were free sounds like Reagan and James Watt trying to hand the national parks over to commercial interests. Libraries are shared resources. The whole point of the library is to offer free to the public literature and resources that will benefit the well-being and intellectual life of that community. The whole idea is that it's a cost shared by taxpayers, then offered free to everyone. Charging for services will encourage municipal governments to cut funding even more, just like all those cookie dough sales make it easier for school boards not to raise taxes on the people who benefit from having a high-quality school district (which is everyone, not just people with kids in school).

3.waltc | June 4, 2009 at 10:37 am

I didn't comment on the M Word post, but have frequently argued this point elsewhere. The problem with "baseline services" and charging for "premium services" is that the "baseline" will almost surely erode over time–making the public library into a two-class institution (those who pay above & beyond taxes being the only ones who really get service). Even if there's a bright line, there's the issue of whether resources and attention will shift toward "premium" services. (Tyler Rousseau's third paragraph says it well.)

4.Fiona | June 4, 2009 at 5:58 pm

No, no, no! You can't charge for library services! Having freely accessible information services is a matter of social justice.

5.Chris | June 5, 2009 at 8:19 am

Public libraries must remain free of charges for their services. Anything less would fly in the face of the mission of public libraries. Money issues need to be addressed by becoming more aggressive about corporate and governmental partnering initiatives, cutting operating costs and smart consolidations.

6.Cynthia | June 5, 2009 at 3:10 pm

I work in a library that charges for some services–DVD's for example. While I don't think services such as reference help or holds should be fee based, I am ok with charging for content.

I would prefer that the fees on content be plowed back into that collection. So that any DVD revenue be used to create a DVD collection with a deeper and more wide ranging catalog.

However, I do believe that this can only truly be discussed on a case by case basis. Some communities simply can not afford fees. For other communities, it can be easier. Still, I feel the fees should always be nominal–no more than $1. In every community there will be people who can not afford any fee. It is that population you need to try and identify and evaluate what can be done. For it to work well, , I feel this would truly need to be a branch by branch kind of review and choice.

7.cwood | June 5, 2009 at 7:04 pm

DVDs may be "loss leaders" perhaps less than a core service, however they do increase library traffic.

In today's libraries perhaps computer technology and high-speed Internet access could be considered premium services, but I am not sure the concept of "premium service" should be applied to a taxpayer funded library.

Nickel and diming is risky business in any economic climate.

8.Anonymous | June 6, 2009 at 12:04 pm

Existing library services are not "free". Taxpayers already pay for the services we provide. Adding fees on top of that, IMHO, erodes the definition of "public library".

9.deepening | June 8, 2009 at 11:20 am

Thanks for the post! My emotions were a little too unruly to post when I read the Mblog posting, and I'm glad to revisit the idea a little later.

What bothers me most about charging for library services is simply that it undermines the very idea of public libraries. Public Libraries are community supported and funded, and are as vibrant and rich as their communities will allow them to be.

Communities regularly vote to raise taxes to support libraries, and also redistribute library funds to other services they temporarily (hopefully) value more highly.

And if a single community finds itself unable to support a library district the way they want to, tax funding laws that support libraries can be reconfigured to widen tax bases to support different configurations of library organizations

And that is where the battles need to be fought. Charging for library services simply undermines the idea that libraries are community structures that depend absolutely on the tax base, and good will of the community. Charging for library services strikes me as a death knell: Why should communities support tax bills to support the library if they have to pay out of pocket and at the desk to use the services??

10.Ann | June 10, 2009 at 7:39 pm

I'm just not down with creating premium services or charging for services. This is not what libraries are about.

When was the last time you were at an airport? Did you notice that first class passengers have a "special" security gate that gets them through faster? The security gate is not owned by the airlines. The security gate is run by the airport and if I'm not mistaken, staffed by TSA employees (federal employees). This differentiation by our government is maddening. Security gates at airports are a necessary hassle. Why should one group of people get through faster and easier because they have or spent more money?

This is what "premium services" offered at a library would look like. You can wait on a shorter line for the new Janet Evanovich if you have the money. You can have home delivery if you have the money. You can get the reference librarian to spend more time with you if you have the money.

Really? Is that really the atmosphere we want to create? I actually think we should have LESS barriers. And hey, if our patrons get sick of waiting on long lines for the latest books, CDs and DVDs, they might be more vocal when it comes time to fund us.

Sometimes you have to show failure in order to get the help you need to succeed.

11.Anonymous | June 11, 2009 at 10:20 am

After all the sound and practical opinions on why libraries should or should not charge a fee for "premium" services (and there seem to be clearly more against than in favor of charging for any library services), I was surprised that nobody mentioned the most basic reason not to charge for library services – it's against the law!

My state law states: "Each library established under this part shall be free to the use of the inhabitants of the city where located …." Specifically, this statute applies to public libraries established by cities and paid for from local taxes. Maybe academic or other types of libraries are not bound by similar laws, but that pretty much ends the debate in my state about charging for services at the local public library.

However, it seems likely that where libraries are allowed to charge for services, of whatever type, patrons will eventually look around and realize that they are already paying for library services throught their taxes, so – "Why is it you're asking me to pay out of pocket for placing a hold on a book when my already considerable taxes are paying to support this library?"

One other observation regards the basic permis of the "freemium" discussion. As was mentioned, businesses uses that to draw customers into their business to provide the opportunity to then "sell" the customer additional services/products they offer. If a library is truly free, and is unable to charge for any of its services, that pretty much defeats the purpose of the "freemium" business model (and also ends the debate).

This topic seems to be limited to a very few special situations and libraries, but it was a nice diversion.

12.Day | June 11, 2009 at 1:17 pm

I really dislike the idea of libraries charging for holds. Sure, it's an interesting idea to make money off of popular books (because some patrons are willing to pay $1 to rent, rather than $20 to own), but it has flaws: people go to the library with intent to get free books, especially in low-income times.

I have no problem, however, with charging for new DVD rentals; that just seems like common sense.

13.Anonymous | June 11, 2009 at 5:00 pm

I have worked in a library that charged ($0.10 a day) for new books, and it was a great way to get books back in three days rather than the normal two-week circ period (and a couple patrons would avoid charges at all by checking a book out in the morning and having it in the bookdrop the next morning).

State laws vary (PA allows premium services as long as a free alternative exists). Where do we draw the line before charging for the use of the copier, which almost everyone does, charging for the use of a meeting room, which is relatively common, charging for DVDs (rare), and charging for books (reviled)?

14.Sarah | June 12, 2009 at 9:46 am

Our services are not free and have never been free. People pay through their property taxes to have these services. The reality is nothing is free. We have to pay for it to provide it to the community and they pay us to have access to it.

First the librarians, boards, and library organizations need to change their mode of speech. Libraires are not free, we offer the freedom to learn, the freeedom to research, the freedom the read for pleasure, the freedom to watch for plesure, the freedom to watch for learnings sake, the freedom to create and enjoy, but there is a financial cost to those services. A financial cost to the library and to the people who use the services.

Once we, the librarians, boards, and library organizations begin to accept that what we offer is not free, we can also begin to show the punblic the incredible value they get for the small fee they pay for libraries.

Even Andrew Carnegie, as he gave money for communities to build libraries, required that the community tax the people for the services that would be provided.

15.Radical Patron | June 14, 2009 at 11:30 am

What a terrific post and thoughtful comments!

Add my name to those concerned about charging fees; even small ones will begin to erode the time-tested foundations of our public library system.

What are the alternatives? I believe a variety of complementary approaches is needed including re-thinking the existing funding model, re-thinking how regional public library resources are managed and extending the integration of libraries with local community needs in order to increase public support.

16.Anonymous | June 15, 2009 at 3:51 pm

How about going the route of theme parks and letting people purchase a "jump" to the head of the line? That way they get the option of waiting an extra couple weeks to get their item or of paying a small free to be closer to the top of the list.

17.waltc | June 15, 2009 at 4:49 pm

In other words, those with more disposable income are offered better library service than those without–that is, those who need libraries the most.

Tyler Rousseau answered this one way up at the top of the comments. I think his answer is right on the money.

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